Military personnel and other government employees fear that filing personal bankruptcy, may negatively impact their security clearance and their jobs (even when instructed to do so by a superior to keep their security clearance). Here are some clearance investigation guidelines.
OPM has an automated system that pulls credit reports and other federal agency information including IRS and Immigration as well as local agency information.
OPM/FSI investigations have 13 check points. Of the most interest to bankruptcy questions are the “Personal responsibility” and “Financial responsibility” areas.
Make them susceptible to being blackmailed or coerced into acts against the United States.
Show them as being personally or financially irresponsible (flagrant overspending on credit and refusing to pay the bills, for example)
Show them as being involved in past or current criminal activity
Show inconsistencies or red flags (an E2 driving a Ferrari, for example)
Misrepresentation, misinformation, lying, omitting material information or any other attempt to mislead the investigation is likely to cause a denial of clearance from the adjudicators.
All responses, written and oral, are made under oath. It’s better to admit the bad news and show the reasons for it along with efforts at mitigation.
OPM/FIS provides a verified report to the “client” – a government agency – and the agency performs the actual adjudication. Depending on the situation, the agency can (1) deny clearance, (2) approve clearance, or (3) issue a provisional or temporary clearance pending further investigation.
There is no method of advance determination of the adjudication. But there is due process and an appeal procedure.
OPM/FSI investigations are reported using the “whole person” concept. Efforts to mitigate negative behavior or action are key elements. For example:
Security clearance applicants must be absolutely truthful during the investigation.
The “Whole Person” concept means that past problems may not have a negative impact on their security clearance if causes can be explained and if mitigation efforts are appropriate and timely.
Past or current bankruptcy may (or may not) negatively impact the security clearance application. It all depends on the circumstances and situation, truthfulness of the applicant and the adjudicating agency.Download PDF
Mark Leffler, Shareholder and Chief Legal Officer, joined Boleman Law Firm in 2000. Mark has spent most of his career litigating in Bankruptcy Court, including bringing numerous actions against debt collectors, mortgage companies, and predatory lenders in bankruptcy. He currently focuses his practice on federal consumer protection litigation, mostly under the Fair Credit Reporting Act.
Mark is President of the NACTT Academy for Consumer Bankruptcy Education, is a frequent author for the NACTT Academy’s webzine, and has served as a panelist at numerous national legal conferences such as the National Association of Chapter Thirteen Trustees (NACTT) and the National Consumer Law Center (NCLC). Mark is AV® rated by Martindale Hubbell, he was selected for inclusion in The Best Lawyers in America for his work in bankruptcy and debtor rights, and he is a frequent speaker and author on bankruptcy matters for Virginia CLE programs.
Mark was raised in Williamsburg, VA, and lives in Norfolk, VA with his wife, Leigh, and two children. In his free time, he enjoys staying physically active, regularly training in powerlifting, snow skiing during the winter, and traveling with his wife.